Mr D Allen and Others v Gambling Commission: 1300121/2021 and Others
EMPLOYMENT TRIBUNALS
Case No 1300121/2021
Between
Mr D Allen (1) Mr M Potter (2) Mr D Chapman (3)ClaimantGambling CommissionRespondent
Before
Regional Employment Judge PiraniIn person for claimantDate 4 April 2025
JUDGMENT
These claims are dismissed pursuant to Rule 38 of the Employment Tribunal Procedure Rules 2024 because they have no reasonable prospects of success and also because they amount to an abuse of process.
REASONS
[1]As set out at a public preliminary hearing in December 2021, with judgment promulgated on 18 January 2022 (the Newby judgment, which is referred to below), these claims raise a substantively complex point about alleged unjustifiable direct age discrimination under the provisions of the Civil Service Compensation Scheme (“the CSCS” or “the Scheme”) in relation to the payment of compensation benefits in cases of early termination of employment on grounds of voluntary redundancy (and voluntary exit) and compulsory redundancy.[2]Large numbers of union and non-union claimants brought complaints in the Employment Tribunal. In essence, the contention was that there should be no taper and no maximum compensation payment to the scheme.[3]The prevalence of claims (both represented and unrepresented) led to a Presidential Case Management Order (the PCMO) on 30 March 2020. The PCMO provided that the claims be split between those: i. claims challenging the provisions for tapering and capping voluntary redundancy or voluntary exit compensation payments in respect of employees who are approaching or have reached their normal pension age of 60 years at their last day of service (schedule A claims); and ii. claims challenging the provisions for tapering and capping compulsory redundancy compensation payments in respect of employees who are approaching or have reached their normal pension age of 60 years at their last day of service (schedule B claims).[4]The former were to be stayed and transferred to the Employment Tribunal at Bristol and the latter to Manchester. The Regional Employment Judges concerned were to coordinate the case management of these claims in both Schedules. These three claims are schedule A claims. Issues to be determined at this hearing[5]This hearing was listed, by notice dated 6 January 2025, to determine:5.1 whether to strike out the claims on the grounds that they have no reasonable prospect of success and/or are an abuse of process alternatively, whether to make deposit orders; and5.2 if the claims proceed, to provide further case management.[6]Pursuant to a judgment issued on 11 November 2024, and after the result of Newby was known, all other claims within Schedule A were struck out because they had no reasonable prospect of success. Materials before the tribunal[7]A joint bundle running to 236 pages was provided. The parties were instructed to exchange written submissions dealing with the issues set out in the case management order dated 19 December 2024 by no later 3 March 2025. The respondent provided written submissions. The claimants did not, although, as set out below, they had already provided their reasoning for resisting strike out or deposit in various emails to the Employment Tribunal. No criticism is made of them for not submitted further written submissions. All the parties assisted the tribunal. The CSCS[8]The CSCS is a non-contributory scheme. Employees do not make any payment to their employer (or suffer any deduction from their earnings) in order to be entitled to its benefits. Crown employees do not have a statutory right to a redundancy payment under the Employment Rights Act 1996.[9]Part 12.4 of the CSCS provides for entitlements under the CSCS in the event of a voluntary redundancy. The starting point is that individuals are entitled to one month’s pay in respect of each year of service subject to a maximum of 21 months’ pay (CSCS 12.4.3 and 12.4.5 read with CSCS 12.1.5(a)(i)).[10]The CSCS provides: i. that the compensation award paid to individuals above pension age is subject to a cap of 6 months’ pay (CSCS 12.4.3 read with CSCS 12.1.5(b)) (“the cap”); ii. that compensation awards paid to individuals within 15 months of pension are subject to tapering provisions whereby the award decreases proportionately as the individual in question approaches pension age (CSCS 12.4.3 read with CSCS 12.1.5(a)(ii) and CSCS 12.1.9) (“the taper”)[11]Accordingly, compensation payments under the CSCS increase according to the length of an employee’s length of service. The effects of the taper and the cap are to reduce the compensation sum payable to individuals who are close to or above their pension age, hence the direct age discrimination. The PCMO and Case Management of the Group claims[12]The first case management preliminary hearing was convened on 16 October 2020 before both the Regional Employment Judges of the South West and North West. At that stage, the respondents did not concede that the relevant provisions of the CSCS amounted to less favourable treatment because of age contrary to section 13(1) of the Equality Act 2010 (“EQA”). At issue in every single case (see paragraph 11 of the Order), was the justification defence under section 13(2). Many of the claims also appeared to have been presented out of time.[13]A further case management hearing was then listed for 10 December 2020. After some dispute it was determined that a public preliminary hearing to deal with justification should be held before addressing time limits. One of the reasons given was that taking that course of action maximises the possibility that there will only be one substantial hearing in this litigation (see paragraph 21).[14]At the further case management preliminary hearing on 10 December 2020 directions were given for the future conduct of the proceedings. No unrepresented claimants were present during this hearing. However, included in the orders, at paragraph 9, was provision for any party or representative not present during the hearing to seek a variation of the CMO.[15]In a further CMO promulgated on 5 May 2021 concern expressed about unrepresented or differently represented claimants was rejected. The Tribunal stated at paragraph 13 of the reasons that it was common practice for it to have to deal with cases where claimants were separately represented, or a mix of represented and unrepresented parties, and ruled that the provisions of Rule 41 of the Employment Tribunals Rules 2013 were sufficient to enable the Tribunal to conduct the public preliminary hearing in accordance with the overriding objective even if some of the claimants whose cases were being considered were unrepresented or separately represented. The December 2021 Public Preliminary Hearing: Newby Judgment[16]The public preliminary hearing on the issue of justification took place on 6, 7, 9, 10, 13, 16 and 17 December 2021 before Judge Doyle, former President of Employment Tribunals (England and Wales), Ms Anne Gilchrist and Mr John Murdie.[17]At that hearing, the respondents conceded potential liability under section 13(1) EQA, but subject to their possible justification defence under section 13(2): If the protected characteristic is age, A does not discriminate against B if A can show A's treatment of B to be a proportionate means of achieving a legitimate aim.[18]The tribunal considered six sample cases which arose for determination, two in each of the following types of case:(1) Compulsory redundancy at or above normal pension age on termination of employment;(2) Voluntary redundancy at or above normal pension age on termination of employment; and(3) Voluntary redundancy within 15 months of normal pension age on termination of employment. This third category of case involved the application of a taper provision in respect of the amount of compensation payable under the terms of the Scheme.[19]The six test claimants were selected because to the cap/taper provisions applied to them. In the event, the tribunal heard evidence on behalf of the claimants from five of the six sample claimants. One was not able to attend and was and was removed as a sample claimant. At paragraph 24 of the reasons, it was noted that it had been agreed, and approved by the Tribunal, that the issues should be resolved by reference to sample cases.[20]The ultimate question for the Tribunal was whether the respondents made out their “justification defence.” The legitimate aims on which the respondents relied were the seven such aims set out in its amended response and in the opening submissions. Although the claimants, who were all legally represented, challenged the genuineness of the respondents’ purported aims and also suggested they were “outdated”, ultimately they were all accepted by the Employment Tribunal as being genuine and legitimate “whether taken individually or collectively, particularly when viewed as a cohesive and coherent set of ends, aims or objectives” (see paragraph 311).[21]The tribunal then went on to consider the issue of proportionality. It noted that the more serious the disparate adverse impact, the more cogent must be the justification. It was for the tribunal to weigh the reasonable needs of the undertaking against the discriminatory effect of the measure and make its own assessment as to whether the former outweigh the latter.[22]The sample claimants’ case was said to be essentially one built upon a perception of unfairness in circumstances where any integrated scheme designed to compensate for loss of employment while also providing immediate or anticipated access to pension benefits must draw a line at some point by reference to length of service and/or to age (see para 336).[23]Ultimately, the tribunal determined that the CSCS is an age discriminatory scheme, but is a proportionate means of achieving a legitimate aim. The direct effect of that Judgment was that the claims of direct age discrimination brought by the sample claimants identified in paragraph 3 of the judgment failed and were dismissed. Events after the Newby Judgment[24]After the Newby judgment was promulgated, all the claimants subject to the PCMO were sent a letter saying it appeared in the light of the judgment sent to the parties on 18 January 2022 that none of the complaints of direct age discrimination brought by any of the claimants in these proceedings have any reasonable prospect of success. It was therefore proposed that those claims be struck out under rule 37(1).[25]A number of claimants represented by the FDA replied on 29 April 2022 objecting to the proposal to strike out their claims, pursuant to rule 37. They also requested a hearing so that the Tribunal could properly consider these objections. Accordingly, a hearing was convened on 16 November 2022 to consider the respondent’s application to strike the claim out.[26]In the event, the claims of the FDA Claimants were dismissed on the basis that they were an abuse of process and therefore vexatious and had no reasonable prospects of success pursuant to the then rule 37(1)(a) of the ET Rules.[27]Factors relevant to the strike out of the FDA claims included that the FDA claimants, who were all legally represented, were throughout aware of the progress of the sample claimants’ claims. In particular, the respondents specifically drew the PCMO and the related timetable their solicitors’ attention in July 2021. The GLD maintained that the FDA claimants could have, but chose not to, take a number of steps including making submissions on case management and the selection of cases and seeking to intervene in the course of the December 2021 hearing.[28]In addition, the FDA claimants were not suggesting that there was a material distinction between their case and the case of other claimants. Rather, according to the respondents, the FDA claimants’ admission is that they now wish to explore obtaining other evidence in support of their claims.[29]The judgment on the strike out of the FDA claims included the following paragraph: The FDA claimants knew they were parties to group litigation which was being managed by way of sample cases which had been listed for hearing. Had [their solicitors], at any stage, prior to the hearing in December 2021, indicated that they either wished to have input into the hearing by way of(i) providing sample claimants(ii) providing other evidence, or(iii) just wished to make submissions at the hearing then it is inevitable that further case management would have taken place so this could be discussed. Of course, it is also trite law in Employment Tribunals that a party who intends to rely upon expert evidence should usually explore with the tribunal whether that evidence is likely to be acceptable, either in correspondence or at a preliminary hearing.[30]The Tribunal then proposed to strike out the remaining claims. However, when it was confirmed that the FDA Claimants were appealing to the EAT, the proposal was withdrawn on 19 April 2023.[31]After a hearing on 12 March 2024 the EAT dismissed the claimants’ appeal against the strike out.[32]On 11 July 2024 the Tribunal wrote again to all remaining claimants, including the three claimants in this hearing, stating that it had received confirmation from the solicitors acting for the FDA Claimants that there was to be no further appeal. It proposed to strike out all other direct age discrimination claims on the basis that they had no reasonable prospect of success. The letter reiterated that although in principle the concept of proportionality involves a balancing exercise between the discriminatory effect of the provisions and the legitimate aim, “in practice it is very unlikely indeed” that the outcome would be different in any individual case given that the same terms of the CSCS were applied to all the claimants in this litigation. It also noted that the application by the FDA Claimants to have the issue looked at again in their cases was unsuccessful. In so far as there was an objection to striking out, attention was drawn to the need to be able to explain “why the result in your own case could be any different”. The claimants’ claims[33]All three of these claims were presented to the Midlands (West) ET. They all fall into the same category: A person whose employment was terminated on the basis of voluntary redundancy (or voluntary exit) and who was at that time at or over normal pension age.[34]Mr Allen’s claim was received by the Tribunal on 23 December 2020, Mr Potter’s on 10 January 2021, and Mr Chapman’s on 12 January 2021.[35]They all allege that at the time of termination of employment, the amount received by way of compensation under the CSCS was “lower than the amount [he] would have received if [he] had the same length of service and [he] was below the age of 60 at the time of termination”. Each claimed payment of “[his] full entitlement to compensation without restrictions based on [his] age”.[36]Mr Allen’s case is that at the time of the termination of his employment his age (63 years 1 month) was above normal pension age (60), and so he received a compensation payment under the CSCS of six months’ pay (£17,118.99).[37]Mr Potter’s case is that at the time of the termination of his employment his age (66 years 9 months) was above normal pension age (60), and so he received a compensation payment under the CSCS of six months’ pay (£16,687.21)[38]Mr Chapman’s case is that at the time of the termination of his employment his age (62 years 4 months) was above normal pension age (60), and so he received a compensation payment under the CSCS of six months’ pay (£16,750.14).[39]Some of the case management (including the PCMO) had occurred before the present claimants’ claims were received. However, that case management applied to all claims covered by the PCMO, whenever they were received. Further, the PCMO was expressly referred to in the grounds of response to the claims. Strike out: no reasonable prospects of success[40]Rule 38(1) of the Employment Tribunal Procedure Rules 2024 provides that the tribunal may, on its own initiative or on the application of a party, strike out all part of a claim on the grounds that it has no reasonable prospects of success.[41]Special considerations apply to discrimination claims. There is in general a strong public interest in permitting such claims to be heard. In general terms, where there are factual disputes between the parties it is not appropriate to strike such claims out: Anyanwu v South Bank Students’ Union [2001] 1 WLR 638. As was explained by Lord Hope in Anyanwu, as a general, rule discrimination issues should be decided only after hearing the evidence. This is because the questions of law that have to be decided are often highly fat sensitive and the risk of injustice is minimised if the answers to those questions are deferred until all the facts are out.[42]The policy of not striking out discrimination claims was considered again in Chandhok v Tirkey [2015] IRLR 195. In that case Langstaff P explained at paragraph 19 of the judgment that discrimination claims usually require a tribunal to establish why the employer acted as it did and “[t]hat will usually require an evaluation of the reasons which the relevant decision-maker(s) or alleged discriminators had for acting as they did. Such an evaluation depends, often critically, upon what may be inferred as well as proved directly from all the surrounding circumstances, including evidence of the behaviour (whether by word, deed, or inaction) of such individuals not only contemporaneously to the events complained of but also in the past and, sometimes, even since the events on which the claim was founded”.[43]Some exceptions to the broad principle were set out at paragraph 21 of the judgment. They included that where, on the pleaded case, there is really no more than an assertion of a difference in treatment and a difference of a protected characteristic and also where claims have been brought so repetitively concerning the same essential circumstances that a further claim is an abuse.[44]The claimants do not seek to go behind the Newby judgment. They do not say that it is wrong. They helpfully explained today, very clearly and articulately, that they merely seek clarification as to whether or not its findings apply to them. They say two things. First, they were employed by the Gambling Commission and therefore, unlike the sample claimants, they were not civil servants. Secondly, and consequently, they say in their case the funding for the CSCS did not come out of public money but rather directly from license fees. Accordingly, any arguments relating to the cost of the scheme involve, they say, different considerations.[45]Mr Potter, who was present online as an observer during the Newby hearing, raised the point directly with the counsel for the PCS claimants. This is then referred to in the judgment at paragraph 330 in the following terms: Mr Mitchell [counsel for the sample claimants] noted that he had become aware that at least one non-sample claimant worked for the Gambling Commission. He submitted that this point should be noted now as it may be that any compensation provided within that scheme is funded by the licence fees derived from the gambling industry and not the public purse. It may be the reach of this specific aim may need to be considered further.[46]The point is reinforced, they say, because the Gambling Commission was not a respondent in any of the sample claims. Further, all the sample claims selected were civil servants. Because of this, they say, or at least query, whether the Newby judgment is or ought to be binding on them and that their claims do have reasonable prospects of success. In other words, what they say is a crucial aspect of their case was not considered in the judgment.[47]Because Newby dealt with sample as opposed to lead claims it is not binding on the claimant’s claims. Nonetheless, because of the detailed and careful findings, which the claimants do not seek to go behind, the respondent in these claims say there are no reasonable prospects of success.[48]The legislative background to the CSCS is the Superannuation Act 1972. Section 1(4) provides that such schemes made pursuant to the Act apply both to persons serving in employment in the civil service and in employment of any other kind is listed in schedule 1 to the Act. The section goes on to provide employment or office can be added to schedule 1 if the money is provided by Parliament or out of the fund specified in the order. Originally, the Gaming Board for Great Britain, the respondent’s predecessor was included in schedule 1. At the material times, Gambling Commission was included in schedule 1.[49]Turning to the Newby judgement itself, provisions relating to cost and funding are referred to in the section dealing with proportionate means. As was set out in paragraph 323 there were 6 issues of proportionality relied on. One of those, set out at paragraph 320, was said to be the potential additional cost of removing the minimum payment provision and so paying every redundant employee compensation payment made up of 21 months’ pay, instead of 6 months’ pay. However, the judgment went on to articulate, in the same paragraph, that the respondent’s case was that the taper should be retained even if its removal would not substantially increase the cost of operating the CSCS. This was because: “its role is not principally to reduce cost, but rather to achieve fairness in relation to payments made to those approaching normal pension age by comparison with those with further to go until reaching normal pension age and those who have already reached normal pension age”.[50]In other words, it was, to all intents and purposes, irrelevant whether the scheme was publicly funded or not. It was also highlighted in the judgment that cost alone could not, in any event, be a legitimate aim. Accordingly, this was the context in which the point was raised by Mr Mitchell, counsel for the PCS claimants, at paragraph 330 of the judgment. The submission was merely noted by the tribunal panel. Its context, and in particular, explicit reference to the derivation of funding, was dealt with previously. In effect, the tribunal endorsed fairness related arguments for the scheme as opposed to cost-based arguments.[51]There was nothing of substance which was specific to civil servants set out in the Newby judgement. The reasoning of the tribunal on issues of justification and proportionality were applicable to all scheme participants. To the extent that there were any differences, because the tribunal was dealing with civil servants and publicly funded schemes only, they were at the furthest of margins. Cost was raised as just one of aspect of proportionality and what were accepted as legitimate aims. In the ultimate analysis, the respondent and the tribunal emphasised fairness as opposed to cost.[52]As has been set out, because the Newby judgment dealt with sample claims only it is not binding on the claimants. However, it is difficult to see how the difference between their cases and the sample claims could possibly result in a different outcome in their favour. What the claimants understandably sought was clarification as to whether or not the judgment applied to them. In my opinion, the judgment is so detailed and comprehensive that it prevents the claimants from saying they have any realistic prospects of achieving a different result in their cases.[53]Moreover, the facts of the present claimants’ cases are indistinguishable from those of Mr Hopkins and Ms Kennedy, whose cases were two of the samples. Mr Hopkins was a member of the “Classic” version of the Principal Civil Service Pension Scheme and Ms Kennedy was a member of the “Premium” version.[54]As Mr Tolley KC puts it: The fact that the Respondent raises part of its budget (in respect of gambling regulation) by way of fees on the gambling industry has no bearing on the question of objective justification. In addition, a significant and separate part of the Respondent’s budget (in relation to the national lottery) also comes by way of direct grant from the Department of Culture Media and Sport.[55]Although, as set out above, strike out in discrimination cases should be avoided as a matter of policy when there are factual disputes, there is very little which could be characterised as a factual dispute in this case. Further, the issue here is not about whether or not there was direct discrimination. Therefore, in contrast with the points set out above in Chandhok v Tirkey, no analysis is required to determine why the employer acted as it did. The basis for the justification arguments is the same in this case as it was in the sample cases.[56]Accordingly, for the reasons set out above, I have determined that these cases have no reasonable prospects of success there for should be struck out pursuant to rule 38. Abuse of Process[57]For the sake of completeness, I will deal with the abuse of process issue also.[58]There was a helpful summary of the law provided by the EAT in the decision relating to the FDA claimants, as follows: i. The power to strike out proceedings as an abuse of process is an exceptional jurisdiction, enabling the ET to protect its procedures from abuse: Allsop v Banner Jones Ltd [2021] EWCA Civ 7, [2022] Ch 55 (“Allsop”), [44(i)]. ii. The jurisdiction is underpinned by a two-fold public interest: that there should be finality in litigation and that a party should not be twice vexed in the same matter: Johnson v Gore Wood & Co [2002] 2 AC 1 (“Johnson v Gore Wood”) 31A-B; Michael Wilson & Partners Ltd v Sinclair [2017] EWCA Civ 3, [2017] 1 WLR 2646, [48(1)]; Allsop, [44(i)]. iii. As for what may constitute abuse, that will depend on all the circumstances of the case: the categories are not closed and the ET’s assessment will be informed by considerations of public policy and the interests of justice: Ashmore v British Coal Corporation [1990] 2 QB 338 (“Ashmore”), 348B-E. Re-litigation may constitute abuse, but there is no presumption that it will do so: Department of Education and Science v Taylor [1992] IRLR 308 (“Taylor”), [55]; Allsop, [44(ii)-(iii)]. iv. In civil proceedings (in contrast to a criminal conviction), there is generally no wider interest in the earlier decision so as to mean re-litigation would bring the administration of justice into disrepute, and the parties themselves may be protected by the principle of res judicata: Allsop, [44(iv)(a)-(b)]. v. Although there is thus no prima facie case that re-litigation will be an abuse in civil proceedings, in the case management of large-scale litigation involving sample claims, the particular circumstances may be such that it is possible to show (the burden is on the party seeking to strike out) that it would be an abuse to permit the re-opening of an issue determined in a sample case: Ashmore, 348H-349D, 352D-F, 353H356A; Taylor, [55]; In Re Norris [2001] UKHL 34, [2001] 1 WLR 1388, [26]. vi. Even in such circumstances, it may not be an abuse to seek to re-litigate a point where there is fresh evidence, which could not have been relied on before, that would entirely change the aspect of the case: Phosphate Sewage Co v Molleson (1879) 4 App Case 801, 814; Hunter v Chief Constable of the West Midlands Police [1982] AC 529 (“Hunter”), 545; Ashmore, 354D-G; in civil proceedings, however, litigation that calls into question an earlier civil decision, may or may not be abusive regardless of the addition of new evidence: Allsop, [44(v)]. vii. Whether proceedings are abusive requires a fact-specific assessment, by which the ET must arrive at a “broad merits based judgment”: Johnson v Gore Wood, 31C-D. viii. The test is always whether the proceedings in question, while not inconsistent with the literal application of the ET’s procedural rules, would nevertheless be manifestly unfair to a party in litigation before it, or would otherwise bring the administration of justice into disrepute: Hunter, 536; Ashmore, 348B-E; Allsop, [44(i)], [45]. ix. Where there is abuse, the ET has a duty to control the proceedings; it is not a matter of judicial discretion: Hunter, 536C-D; Allsop, [44(i)].[59]All the claimants in this case were included in the schedule to the Newby judgment. They also had, as was set out above, their attention expressly drawn to the PCMO. Mr Potter was present as an observer during the Newby hearing. Although he says he asked the PCS whether or not they wanted him to become a sample claimant he either did not let the judge know of his request or make his request direct to the judge.[60]As I set out in the FDA judgment, it is inconceivable that an Employment Judge would not have facilitated their involvement had a request been made. The same applies to these three claimants. The tribunal would have then done what it could, in accordance with rule 3, to seek to ensure that there would be only one objective justification hearing. To do otherwise would have undermined the whole purpose and effect of previous case management orders.[61]Similarly, it would have been open to the claimants to raise the issue about not being civil servants at the time of the FDA preliminary hearing.[62]The whole rationale of the Newby hearing was facilitation of the inclusion sample claimants to cover all the different types of claims in an effort to achieve effective determination of all the claims. This was said to maximise the possibility that there would only be one substantial hearing in the litigation. The benefits of selecting sample claimants are obvious in litigation of this sort.[63]One of the points made in Ashmore, which raised important questions as to how court and tribunals deal with large numbers of cases that raise similar factual issues, related to costs. Ashmore itself was a case concerning sample cases in equal pay litigation. Stuart Smith LJ held that in cases where sample cases have been chosen so that the tribunal can investigate all the relevant evidence is fully as possible, and findings of been made on that evidence, absent fresh evidence with justifies the reopening of the issue, it is no answer to say if the further claims fail the employers can be compensated in costs. He went on to say that not only is this seldom compensation for inconvenience and the disruption caused by litigation but is not in the interests of justice for the time of the courts or tribunals to be taken litigating claims that have effectively already been decided. The judge then went on to highlight the further problem of the potential floodgates in that were the further case be allowed to proceed he could see no reason in principle why the other claimants, who were not among the sample claimants, should not also have a similar right.[64]Although there are significant differences between the three claimants in this case and the FDA claimants (the latter were legally represented and sought to introduce new evidence) I, nonetheless, determine that permitting these claims to continue would also amount to an abuse of process.[65]I have considered that the burden of establishing abuse is on the respondent and that strike out in such circumstances is exceptional. Nonetheless, these claims form part of a carefully managed group litigation. Not only were the claimants expressly informed of the PCMO but they were also aware of the shape and form of how the litigation progressed. Accordingly, the claims are also struck out for abuse of process. The respondents should not be expected to keep dealing with the same issue.